New carbon risk management system for instos

New carbon risk management system Emmi, aimed at enabling institutional investors a better understand their financial exposure to carbon risks and aligning their strategies with a net zero future, has been backed by superannuation funds and investment managers. 

This included super funds Aware Super, Energy Super, Future Super, as well as investment and asset managers such as Melior, Hyperion and Perennial who have already backed the platform and its ability to evaluate the climate-related financial risks of businesses in their investment portfolio. 

Institutional investors would also be able to use Emmi to manage down risks and reallocate capital to maintain or improve their target-risk-adjusted returns.  

The firm said while an increasing number of businesses are committed to sustainability, they often struggle to accurately assess their carbon exposure risk and evaluate the effectiveness of their strategy to reduce their financial exposure to carbon over time and according to the Reserve Bank of Australia, in 2020, joined with more than 60 other central banks worldwide to warn of the significant financial and economic risks if more isn’t done to reduce emissions. 

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Emmi founder and chief executive, Michael Lebbon, said: “As a purpose and impact driven organisation, we designed Emmi as a completely independent, open, transparent and affordable system that anyone can utilise to help make our world a more sustainable place, while improving their long-term returns. 

“Emmi will bring carbon into mainstream financial analysis, setting a universal benchmark that makes it easier for investors to understand their exposure and reward those businesses who are taking truly meaningful action.” 

Also commenting, Aware Super head of responsible investments, Liza McDonald said: “At Aware Super we view climate change as the most significant financial risk to our portfolio and to our members’ long-term financial future.  

“We have been responding to these risks in an active and coordinated way since 2015 and have set ambitious targets and goals for how we will achieve net zero by 2050. Having a tool like Emmi gives us valuable insights into our carbon exposure and climate risks to ensure our investments are sustainable and continue to deliver for our members in not just years to come, but decades to come.”